The Consumer Rights Act, which comes into force today, will help protect consumers but it will also pose significant challenges for retailers.
The new legislation has been heralded as the biggest overhaul in this area of practice for more than a generation.
It is fundamental that retailers understand what the implications are and what new processes need to be implemented.
The Act makes significant changes to consumer protection laws and clarifies existing regulations with the objective to reduce disputes and disagreements between traders and their customers.
Many companies will be familiar with existing consumer rights and follow all the appropriate steps to ensure that they comply with the law.
But the new rules will tighten up a number of areas including communication, refunds and redress for customers who buy digital products. It is essential that businesses are familiar with these changes to avoid falling foul of the new rules.
There are some important steps businesses should take to ensure they understand and comply with the new rules.
Train your staff
Managers and sales staff will need to be advised about new consumer rights and informed of their responsibilities at point of sale. For instance, the legislation introduces a new term for service providers which means that certain information about the type of service, whether communicated orally or in writing, will be binding.
This means that sales staff will need to extremely careful about what they say about their products and will need to receive training and guidance as to how they communicate with customers.
Review all your collateral
The new Act introduces significant changes in the areas of customer satisfaction, refunds and repairs. This means that businesses will need to review all terms and conditions and go through all existing promotional and sales collateral including store notices, brochures and even their website to ensure that it complies with the new rules
Satisfy the customer
As per the existing legislation, goods sold to consumers must be of satisfactory quality, be fit for purpose and match their given description.
The new legislation will introduce a clear timetable which outlines the consumer’s right to reject faulty goods. For example, if a defect is discovered within 30 days, the new law allows for the consumer to reject the product and receive a full refund. After that 30 day bracket, the consumer can request a repair or a replacement.
The law states that businesses only have one attempt at fixing the issue: if they fail to do so, the consumer can pull out of the transaction or demand a price reduction.
Look at your contracts
The Act also updates existing legislation which applies to terms and conditions between businesses and their customers.
Consumers will be able to challenge terms and conditions which are not fair or are hidden in the small print. Businesses must familiarise themselves with terms which may be classed as unfair.
Terms outlined in a contract must be transparent and prominent, expressed in writing and in clear language. Businesses need to ensure that their T&Cs are fit for purpose.
Address digital dilemmas
The new Act introduces some specific rules relating to digital content which includes software, music, games, films, e-books and apps. Where the digital content is not tangible – such as software downloaded from the internet for instance – the consumer cannot reject the product but has the right to ask for a repair or replacement.
Businesses could also be liable if the digital content sold damages the consumer’s own device and this could end with businesses footing a hefty bill. As with so many big business issues, being able to prepare for and adapt to these changes is vitally important. And waiting for customers to complain or challenge you could prove very costly indeed.
As with so many big business issues, being able to prepare for and adapt to these changes is vitally important. And waiting for customers to complain or challenge you could prove very costly indeed.
- Greg Hughes is a senior associate at national law firm Clarke Willmott LLP